By Alois Vinga
DEPOSIT fees and related bank charges constituted 86% of ZB Financial Holdings (ZBFH) total earnings of $234 million in the nine months ended September 30 2019.
In the financial institution’s trading update released Monday, ZBFH said these fees accounted for a greater proportion of the group’s total earnings.
“For the nine months ended 30 September 2019, total revenue grew by 294 % to $234.1m from $59.4m achieved in the comparative period in 2018. Non-funded income contributed 86% of total revenue, while net interest income contributed 14%,” the update reads.
Operating expenses increased by 109% from $42 million for the nine months ended 30 September 2018 to $87 million for the nine months ended 30 September 2019.
This cost out-turn is below inflation because increases in salaries and wages have lagged behind Year-on-Year inflation, last reported as 175.66% as at 30 June 2019.
The Group attained a profit after provisional taxation of $125.3m for the nine months during the period under review.
Spurred by a significant contribution from fair value credits and exchange gains from the revaluation of its foreign exchange position, the Group achieved an upsurge in total revenue.
“This represents an 806% increase from $14 million posted in the comparative period in 2018. The group’s total asset base grew by 128% to $1.5 billion as at 30 September 2019, which was 128% from the closing balance for the prior year $663.2 million as at 31 December 2018.
Total earning assets were at $830 million, having increased by 83% over the same period.
However, ZBFH has predicted a gloomy outlook going forward owing to macro-economic challenges despite current government interventions to address the problems.
The bank has cited the continued shortages of foreign currency and local bank notes, a rapidly depreciating local currency against major currencies, shortages of fuel and energy amid declining household disposable income levels, as threats characterising the current operating environment.